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StarwoodLeadership Forum
NYC20 June 2000
Tom Peters Seminar2000
Brand Everything:Distinct or Extinct!
Brand It! Now, More Than Ever!
“The increasing difficulty in differentiating between products and
the speed with which competitors take
up innovations will assist in the rise and rise of the brand.”
Gillian Law and Nick Grant, Management [New Zealand]
Brand Leadership!
“A key – perhaps the key – to leadership is the effective
communication of a story.”
Howard Gardner Leading Minds: An Anatomy of Leadership
“Corporate Religion is a completely new way of thinking about companies. Today, the product is still the main communication
highway in the company. When companies make the shift to selling solutions, brands and
attitudes … communicating the company’s attitudes and values
becomes the decisive parameter for success. It demands that you find out
who you are as a company.”Jesper Kunde, Corporate Religion
Part I: Brand InsidePart II: Brand Outside
Part III: Brand Leadership
No Wiggle Room!
“Incrementalism is innovation’s worst
enemy.” Nicholas Negroponte
Just Say No …
“I don’t intend to be known as the ‘King of the
Tinkerers.’ ”CEO, large financial services company
(New York, 5-99)
“Change the rules before
somebody else does.”
Ralph Seferian, VP, Oracle
The [New] Ge Way
DYB.com
New Game!
L.A.D.T.I.R.S.*
*Life-and-death-total-industry-reinvention-struggles
Reinventing The Hospitality Industry!
Starwood Goes for It!
Brand Inside
Brand Org: Lean, Linked & Electronic
And Now the Equivalent …
White Collar Revolution!
Robert Reich on Sara Lee
“The most profitable businesses in the future will act as knowledge brokers, linking insights into what’s available
with insights into the customer’s individual needs
and preferences.”
“We want to be the air traffic controllers
of electrons.”Bob Nardelli,
GE Power Systems
Good Start
Starwood Preferred Guest
STARS/Starwood Technology and Revenue
Systems
Brand Inside
Brand Talent: The Great War for Talent
Issue Y2K
The Great War for Talent!
“When land was the scarce resource, nations battled
over it. The same is happening now for talented people.”
Stan Davis & Christopher Meyer, futureWEALTH
John Chambers “Gets it”!!
There is no “talent shortage” …
if …
you are a GPTW*
*Great Place To Work
Part I: Brand InsidePart II: Brand Outside
Part III: Brand Leadership
Brand Outside
The Commodity Trap
Quality Not Enough!
“While everything may be better, it is also increasingly
the same.”
Paul Goldberger on retail, “The Sameness of Things,” The New York Times
“The ‘surplus society’ has a surplus of similar companies, employing similar
people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.”
Kjell Nordstrom and Jonas Ridderstrale, Funky Business
“When we did it ‘right’ it was still pretty
ordinary.”
Barry Gibbons on
“Nightmare No. 1”
The Character-less Hotel
Indistinguishable Rooms!/
Indistinguishable Staff!
Brand Outside
Strategy 1:
Lead the Customer!
“Wealth in this new regime flows directly from innovation, not
optimization. That is, wealth is not gained by perfecting the known,
but by imperfectly seizing the unknown.”
Kevin Kelly, New Rules for the New Economy
Amen!
“The Age of the Never Satisfied
Customer”Regis McKenna
Singapore Air: $18.5K/seat for entertainment systems
Peninsula NY: $17K/room on personal technology
Westin (Heavenly Bed) vs. Ritz Carlton (300 count Italian sheets)
vs. Four Seasons (mattress madness)
GE’s New Six Sigma Approach
Old view: Out of service 9 days. 4 days are transport, which is client
responsibility.
New view: ALL 9 DAYS ARE OUR RESPONSIBILITY! Why? 9 days =
Client’s World.Source: Steve Kerr, VP, GE
Fact:
You are responsible, in my mind,
for … THE TURNKEY TRAVEL EXPERIENCE … and I don’t discriminate among
who provides what.
Hotel in Las Vegas
MY STAY HAS BEEN LOUSY!
YOUR PROBLEM: A GROTESQUE START. To wit: 1 hour, 7 minutes in an airport cab line @ 10:30 P.M.
(1:30 A.M. EDT)
Brand Outside
Strategy 2:
Use E-Commerce
to Re-invent the Business!
???????
$35,000,000.
Dell’s Web sales … daily
Tomorrow Today: Cisco!
90% of $14.4B(Cisco Connection ONLINE)
Save $500M(service and tech support)
C.Sat e >> C.Sat HCustomer Engineer
Chat Rooms/Collaborative Design ($1B “free” consulting)
Lessons from Earth’s Richest Human
Everything [In & Out] via Internet
$1B in ’99-’00[on a cost base of $6B]
$1B in ’00-’01
Welcome to
D.I.Y. Nation!“Changes in business processes will emphasize self service. Your costs as
a business go down and
perceived service goes up because customers are conducting it
themselves.” Ray Lane, Oracle
Anne Busquet/ American Express
Not: “Age of the Internet”
Is: “Age of Customer Control”
“Where does the Internet rank in priority?
It’s No. 1, 2, 3, and 4.” Jack Welch
There are 2 Kinds of …
Defense*
vs.
Offense**
*Fend off upstarts.**Reinvent our marketspace!
Web Strategy: GE Power Systems
“Launch and Learn”(4 sites in 30 days)
“It’s better to be first with less than last with more. Success on
the Web isn’t just about time to market, it’s also about
‘time to learning.’ ”
Jeff Levy, eHatchery
Jargon Bath!
Bureaucracy free …Systemically integrated …
Internet intense …Knowledge based …
Time and location free …“Instantly” responsive …
Customer centric …Mass customization enabled.
Translation …
Bureaucracy free = Flat org, no B.S.Systemically integrated = Whole supply chain
tightly wired/ friction freeInternet intense = Do it all via the Web
Knowledge based = Open accessTime and location free = Whenever, wherever
“Instantly” responsive = Speed demonsCustomer centric = Customer calls the shotsMass customization enabled = Every product
and service rapidly tailored to client requirements
Brand Outside
Strategy 3:
Women Rule!
?????????
Home Furnishings … 94%Vacations … 92%
Houses … 91%Bank Account … 89%
Health Care … 75%Etc.
48% working wives > 50%80% checks
61% bills53% stock (mutual fund boom)
43% > $500K95% financial decisions/
29% single handed
$3.3T + $1.5T = $4.8T*
* Larger than Japan!
Yeow!
1970 … 1%
2002 … 50%
OPPORTUNITY
NO. 1!
Read This Book …
EVEolution: The Eight Truths of Marketing to Women
Faith Popcorn & Lys Marigold
The Difference Factor!
“Men and women don’t think the same way, don’t communicate the same
way, don’t buy for the same reasons.
“He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go,
they make connections.”
EVEolution: Truth No. 1
Connecting Your Female Consumers to Each
Other Connects Them to Your Brand
Weight Watchers International “Model”
“What if ExxonMobil or Shell dipped into their credit card database to help commuting women
interview and make a choice of car pool partners?”
“What if American Express made a concerted effort to connect up female empty-nesters
through on-line and off-line programs, geared to help women re-enter the workforce with today’s
skills?”
EVEolution
27 March 2000: email to TP from Shelley Rae Norbeck
“I make 1/3rd more money than my husband does. I have as much financial
‘pull’ in the relationship as he does. I’d say this is also true of most of my women
friends. Someone should wake up, smell the coffee and kiss our asses long enough
to sell us something! We have money to
spend and nobody wants it!”
Psssst! Wanna see my “porn”
collection?
Brand Outside
Strategy 4:
Design Rules!
All Equal Except …
“At Sony we assume that all products of our competitors have basically the same
technology, price, performance and
features. Design is the only thing that differentiates one product
from another in the marketplace.”
Norio Ogha
Design as Soul
“We don’t have a good language to talk about this kind of thing. In most people’s
vocabularies, design means veneer. … But to me, nothing could be further from the
meaning of design. Design is the fundamental soul of a
man-made creation.”Steve Jobs
Starwood
W
Brand Outside
Strategy 6:
It’s the Experience!
“Experiences are as distinct from services as services are from
goods.”Joseph Pine & James Gilmore, The
Experience Economy: Work Is Theater & Every Business a Stage
“The [Starbucks] Fix” Is on …
“We have identified a ‘third place.’ And I really believe that sets us apart. The third place is
that place that’s not work or home. It’s the place our
customers come for refuge.”Nancy Orsolini, District Manager
Experience: “Rebel Lifestyle!”
“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid
of him.”
Harley exec, quoted in Results-based Leadership
“Car designers need to create a story. Every car provides an
opportunity to create an adventure. …“The Prowler makes you smile. Why? Because it’s focused. It has a plot, a
reason for being, a passion.”
Freeman Thomas, co-designer VW Beetle; designer Audi TT
Hmmmm(?): “Only” Words …
StoryAdventure
Smile Focus
PlotPassion
PlotWilliams Sonoma = 6 [was 10]
Crate & Barrel = 8Sharper Image = 9+
Smith & Hawken = 8+Garnet Hill = 9
L.L. Bean = 5 [was 9+]Land’s End = 7+
Colonial Williamsburg = ?
Hotel World
Hotel Hell
No Fresh Air!Smoke Stink!
Polyester Blankets!Lousy Technology!
< 24 Hour Room Service!< 24 Hour Fitness Club!
Long check-in Line!No Taxis!
“Hotel Feel” [No Soul!]
“It was much later that I realized Dad’s secret. He gained respect by giving it. He talked and listened to the fourth-
grade kids in Spring Valley who shined shoes the same way he talked and listened to a bishop or a college
president. He was seriously interested in who you were and what you had to
say.”
Sara Lawrence-Lightfoot, Respect
“The deepest human need is
the ... NEED TO BE APPRECIATED.”
William James
Brand Outside
BRAND POWER!
Brand = You Must Care!
“Success means never letting the competition define you. Instead you have to define
yourself based on a point of view you care deeply about.”
Tom Chappell, Tom’s of Maine
“Create a Cause, not a ‘business.’ ”
Gary Hamel, Fortune (06.00), on re-inventing a company (Exemplar #1:
Charles Schwab)
Scott Bedbury/ Nike, Starbucks
“A Great Brand taps into emotions. Emotions drive most, if not all, of our decisions. A brand reaches out with a powerful connecting experience. It’s an
emotional connecting point that transcends the product.
“A Great Brand is a story that’s never completely told. A brand is a metaphorical story that
connects with something very deep - a fundamental appreciation of mythology.
Stories create the emotional context people need to locate themselves in a larger experience.”
Brand = Special = Passion = Plot =
Compelling Mythology = Cause = Connection = Caring
Rules of “Radical Marketing”
Love + Respect Your Customers!Hire only Passionate Missionaries!Create a Community of Customers!
Be insanely True to the Brand!
Sam Hill & Glenn Rifkin, Radical Marketing (e.g., Harley, Virgin, The Dead, HBS, NBA)
Reprise: Top Opportunities
Tech In & OutWomen (Etc.)Brand Power
=Reinvent “Hospitality
Business”
Part I: Brand InsidePart II: Brand Outside
Part III: Brand Leadership
Brand Leadership
Passion Rules!
“Leadership is a performance. You have to be
conscious of your behavior, because everybody else is.”
Carly Fiorina
Brand Leadership:ENTHUSIASM RULES!
“I am a dispenser of enthusiasm”/ Ben
Zander
“If things seem under control, you’re just
not going fast enough.”
Mario Andretti